In the past, filing bankruptcy has carried a stigma that has made many Americans avoid it at all costs. Recently, there has been an awakening to the truth about bankruptcy filing. Many Americans have used filing bankruptcy as a way to eliminate debt as a last resort in the recent years. It’s not because they chose to, but because they had to. The funny thing is, most of these individuals after filing for bankruptcy only wish they did it sooner. Looking back, they see how much money was given to creditors on a monthly basis to continue making minimum monthly payments. They thought they were doing the right thing, but all they were doing was kicking the can down the road to the inevitable bankruptcy filing. Many people spend years of stress while trying to make ends meet. Some people even lose their families because of the stress of financial troubles, only if they had decided to file for bankruptcy sooner.
Filing Chapter 7 bankruptcy is probably the most popular form of debt relief. The reason most people use Chapter 7 as their resource is because of the bankruptcy discharge and no repayment plan. Many people walk from a Chapter 7 bankruptcy being completely debt free from unsecured debt. The only debt that these people have, is either that they choose to keep or legal responsibilities which cannot be removed by any means. When an individual makes the decision to file bankruptcy, they will know that creditors will no longer be able to bother them. The automatic stay will stop all collection activity against the debtor. The automatic stay is so powerful it will stop foreclosure, lawsuits and wage garnishments. This allows the individual that is filing bankruptcy to get their life back and no longer have to worry about picking up the phone to be berated by a creditor.
At the other end of the spectrum we have Chapter 13 bankruptcy. Chapter 13 is not as popular because there is a repayment plan that is required to complete that takes 3 to 5 years. But in the recent years, Chapter 13 bankruptcy has become very popular to stop foreclosure and protect the family home by giving the individual the ability to negotiate using the power of bankruptcy and the automatic stay. Many Americans are still struggling to make ends meet but are still getting by because they have credit still available. At some point in time this new found wealth being distributed by the banks will have to dry up and these people will no longer be able to kick the can down the road. That’s why filing bankruptcy is the good news that every American needs to keep in their back pocket as their ace in the hole. Before they give up, they can file bankruptcy and eliminate their debt while re-organizing their finances to get back on their feet.